Stalled Brooklyn development near Domino Sugar files for extension

The 2,200-unit Domino Sugar apartment project that won approval yesterday from the City Council land use committee is not the only substantial project with plans for tall towers on the Brooklyn waterfront.

Just two blocks south of the massive Domino Sugar site in Williamsburg is the former Kedem Winery property 420-430 Kent Avenue between Broadway and South 9th Street, where development company Rector Hylan won approval in June 2006 for 18- and 24-story towers with 450 apartment units.

The project has been all-but-forgotten and never entered the construction phase. On June 2, less than two weeks before the special permit was to expire on the four-year anniversary of their approval by the City Council, Rector Hylan applied to extend the permits for another three years, Department of City Planning documents show. The application is pending.

Rector Hylan, the developer of the project, located on nearly three acres at 420-430 Kent Avenue, could not secure financing as the market soured, zoning expert and representative for the company, Eric Palatnik, said.

“The cost of construction and the general economic climate has prevented the project from progressing,” said Palatnik, who filed the application with the Department of City Planning on behalf of Rector Hylan.

Rector Hylan is located in Lower Manhattan and is led by Pincus Neiman, company president, records filed with the Department of Buildings show. The company did not respond to requests for comment.

The 2006 special permit from City Planning and the City Council gave Rector Hylan waivers to build larger and taller buildings than would be allowed under the property’s zoning. If it had expired, the owner would have had to start the complex and time-consuming land use process over again.

Insiders consider the renewal application a positive sign, but also one that underscores the weaker market.

“Lots of folks never got their projects started… but, preserving the right to do so is the smart thing to do,” Tim King, principal with Brooklyn-based commercial brokerage CPEX Real Estate, said in an e-mail. “The market is beginning to come to life, and those developers who can come out of the ground in the next cycle will do fine.”

Rector Hylan was facing an expiring permit on June 13, and so earlier this month, on June 2, it filed an application for a three-year extension, Department of City Planning reports show.

The developer agreed to set aside 20 percent of the units as affordable, city records show.

The long-delayed project goes back more than seven years. The six lots, most of which were used by the Kedem Winery company to produce kosher wine, were bought by Rector Hylan in 2003 for $11.3 million, city property records show.

The Kedem site is just north of Schaefer Landing, at 440 Kent Avenue, a 350-unit residential development in two buildings which was completed in 2005.

Another nearby project highlights the problems a developer can face when trying to win approval from the community. The local Community Board 1 last year did not give its approval for an 801-unit mixed-use Rose Plaza on the River project, between Division Avenue and Schaefer Landing.